Nigeria Labor Says No Agreement To End Fuel Strike

Shares

January 15, 2012 10:45AM (UTC)

ABUJA, Nigeria (AP) — Nigeria's government and labor unions failed to end a paralyzing nationwide strike over high gasoline costs, potentially sparking an oil production shutdown in a nation vital to U.S. oil supplies.

It was not immediately clear early Sunday whether a major oil workers' union had gone ahead with its threat to have its members walk off their jobs starting at midnight in an effort to halt oil production. But the fact labor unions left quickly from their meeting with the government and no one announced when talks would resume raised concerns the impasse would see Nigeria go through more days of disruptive strikes.

Advertisement:

Nigeria, which produces 2.4 million barrels of oil a day, is the fifth-largest oil exporter to the United States. Any disruption to oil production could roil the oil futures market at a time traders remain concerned about world supply.

President Goodluck Jonathan did not show up for a meeting with union representatives held Saturday night at the presidential villa in Nigeria's capital Abuja, nor did Vice President Namadi Sambo. Instead, the nation's Senate president and its House speaker represented the government along with other officials.

After the meeting, Nigeria Labor Congress President Abdulwaheed Omar told waiting journalists: "We have not reached a compromise."

Senate President David Mark described the talks as "very fruitful," though he offered no other details.

Nigeria has been gripped by a paralyzing strike since Monday when labor unions called the nationwide work stoppage in response to a government decision to remove subsidies, causing fuel prices to more than double in Africa's most populous nation. However, oil workers mostly remained on the job.

Advertisement:

On Thursday, the Petroleum and Natural Gas Senior Staff Association of Nigeria threatened to stop all oil production in Nigeria at midnight Saturday. President Babatunde Ogun and other union officials were not immediately available to confirm whether its members had left their posts.

The union's ability to enforce a shutdown across the swamps of Nigeria's southern delta to its massive offshore oil fields remains in question. Much of Nigeria's land-based oil fields remain largely automated and an increasing amount of production comes from large offshore oil fields far from the country's coasts.

But the threat of a strike caused jitters on global oil markets Friday. And if something breaks, if the pressure in the wells fluctuate, or if countless other problems occur that cause an automatic system shutdown, there wouldn't be anyone there to get production running again at the Nigerian fields.

The strike began Monday, paralyzing the nation of more than 160 million people. The root cause remains gasoline prices: President Goodluck Jonathan's government abandoned subsidies that kept gasoline prices low on Jan. 1, causing prices to spike from $1.70 per gallon (45 cents per liter) to at least $3.50 per gallon (94 cents per liter). The costs of food and transportation also largely doubled in a nation where most people live on less than $2 a day.

Advertisement:

Anger over losing one of the few benefits average Nigerians see from being an oil-rich country, as well as disgust over government corruption, have led to demonstrations across this nation and violence that has killed at least 10 people. Red Cross volunteers have treated more than 600 people injured in protests since the strike began, the International Committee of the Red Cross said Friday.

Even if strikers are only partially successful, fears of tightened global supplies could raise oil prices by $5-$10 per barrel on futures markets next week. Gasoline prices would follow, rising by as much as 10 cents per gallon and forcing U.S. drivers to spend an additional $36 million a day at the pump.

Experts predict the national average in the U.S. could rise as high as $4.25 per gallon ($1.12 a liter) in 2012.

Advertisement:

Companies with subsidiaries in Nigeria include Chevron Corp., Exxon Mobil Corp., Italy's Eni SpA, Royal Dutch Shell PLC and French firm Total SA, which operate in tandem with the state-run Nigerian National Petroleum Corp.

___

Jon Gambrell reported from Lagos, Nigeria and can be reached at www.twitter.com/jongambrellAP.